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Hong Kong exports post biggest plunge in 70 years

Shipments drop nearly 37% as city's economy hit by global headwinds

Hong Kong's economy took a hit as years of strict COVID curbs sapped growth.   © Reuters

(Reuters) -- Hong Kong's total exports value dropped 36.7% from a year ago, the biggest percentage drop since records began in 1953, government data showed on Monday, amid a weaker external environment and the early arrival of the Lunar New Year holiday.

Total exports stood at 290.9 billion Hong Kong dollars ($37.07 billion) in January, compared with HK$459.5 billion at the same time last year and the lowest since February 2020's HK$238.6 billion.

Hong Kong's economy is expected to grow 3.5% to 5.5% this year after shrinking 3.5% in 2022, as it leaves behind COVID-19 restrictions that had isolated the city.

January imports plunged a record 30.2% from the same period a year ago to HK$316.3 billion, the lowest since February 2020 at HK$277.1 billion.

"The slower global economic growth will continue to pose severe challenges to Hong Kong's export performance in the near term," a government spokesperson said, adding that expected faster growth on mainland China and the lifting of cross-boundary truck movement restrictions should alleviate pressure.

The early arrival of Lunar New Year holidays caused disruption in production and shipments.

Hong Kong's visible trade deficit was HK$25.4 billion, the government added.

In December, total export values dropped 28.5% from the same period a year ago, and imports slumped 23.5% with a trade deficit of HK$51.65 billion.

"The collapse of Hong Kong's trade reflects the weak global demand due to high interest rates and the downturn in tech cycle," said Gary Ng, senior economist at Natixis Corporate and Investment Bank.

"Despite the cyclical rebound in China's reopening, the pressure will persist through supply chains in the first half of 2023," Ng added.

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